Copper Rises as Commodities Advance Amid Stimulus Speculation

Copper rose in London, rebounding
from three sessions of declines, as commodities and equities
advanced amid speculation central banks will take more steps to
spur economic growth.

The Reserve Bank of Australia has more room to cut interest
rates, Treasurer Wayne Swan said after inflation was slower than
estimated. Raw materials including crude oil climbed and the
MSCI All-Country World Index (MXWD) of shares headed for a fourth
increase. Copper gained on buying of metal to close out bets on
declines, or short-covering, said Newedge Group SA.

“U.S., European and Asian stock markets and energy all
bounced back up and the mood in commodities seems to be
improving,” Pengjiang “Richard” Fu, London-based director for
Asian commodities trading at Newedge, said by e-mail. “Some
short-covering on the SHFE triggered the bounce of copper,” he
said, referring to the Shanghai Futures Exchange.

Copper for delivery in three months added 1.7 percent to
$6,990 a metric ton by 9:43 a.m. on the London Metal Exchange.
Prices slumped the most since 2011 last week as the metal
entered a bear market. Copper for delivery in July rose 2.2
percent to $3.1715 a pound on the Comex in New York.

Prices also increased as the Bank of England said it will
extend a plan aimed at providing cheaper loans to companies and
consumers for a year.

Positioning in copper was “extremely short,” leaving the
market “increasingly vulnerable” to a short-covering rally,
Gayle Berry, an analyst at Barclays Plc in London, said in a
report April 19.

The number of copper futures outstanding in London, or open
interest, came to 480,096 contracts as of April 22, remaining at
the highest since December 2011, LME figures showed today. Open
interest gained 2.1 percent in a week as copper slid 3.7
percent, suggesting new short positions.

Stockpiles of the metal tracked by the LME fell 0.2 percent
to 620,375 tons, daily exchange figures showed. Orders to take
copper from warehouses gained 2.4 percent to a record 167,500
tons on bookings in South Korea.